A heavily weighted aggressive portfolio with high risk and significant exposure to basic materials

Report created on Dec 14, 2024

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

Positions

The portfolio is heavily weighted in common stocks, making up nearly 99% of the holdings, with a small allocation to bonds and cash. This composition indicates a high-risk profile, as stocks are generally more volatile than bonds or cash. The focus on common stocks suggests an aim for capital appreciation over income generation. To balance risk, consider increasing exposure to bonds or other fixed-income securities. Diversifying across different asset classes can help mitigate potential losses during market downturns.

Growth Info

Historically, the portfolio has underperformed, with a compound annual growth rate (CAGR) of -9.94%. This poor performance is compounded by a significant maximum drawdown of -38.81%. These figures highlight the volatility and risk associated with the current asset allocation. Although past performance is not indicative of future results, it suggests a need for reassessment. Evaluating past performance helps identify weaknesses in the portfolio. Consider reallocating assets or incorporating more stable investments to improve resilience and potential returns.

Projection Info

Forward projections using Monte Carlo simulations, which analyze potential future returns based on historical data, show a grim outlook. With a majority of simulations predicting negative returns, the model highlights the portfolio's vulnerability. While historical data provides a basis for projections, it cannot predict future market conditions. Given the negative projections, consider rebalancing the portfolio towards a more diversified and stable asset mix to enhance potential outcomes and reduce risk.

Asset classes Info

  • Stocks
    99%
  • Bonds
    1%

The portfolio's allocation is heavily skewed towards equities, with minimal exposure to bonds and cash. This concentration increases volatility and risk. A diversified asset allocation typically includes a mix of stocks, bonds, and other asset classes to balance risk and return. To improve diversification, consider increasing bond holdings or exploring alternative investments. A more balanced allocation can help stabilize returns and reduce the impact of market fluctuations.

Sectors Info

  • Basic Materials
    22%
  • Energy
    19%
  • Technology
    18%
  • Consumer Discretionary
    12%
  • Real Estate
    10%
  • Financials
    5%
  • Industrials
    4%
  • Health Care
    3%
  • No data
    3%
  • Telecommunications
    2%
  • Utilities
    1%
  • Consumer Staples
    1%

The portfolio is concentrated in basic materials, energy, and technology sectors, which together account for nearly 60% of the holdings. This concentration exposes the portfolio to sector-specific risks, such as changes in commodity prices or technological disruptions. Diversifying across more sectors can help mitigate these risks. Consider reallocating investments to underrepresented sectors like healthcare or consumer staples, which can provide stability during economic downturns.

Regions Info

  • North America
    59%
  • Latin America
    29%
  • Europe Developed
    4%
  • Asia Emerging
    4%
  • No data
    3%

Geographically, the portfolio is concentrated in North America and Latin America, with limited exposure to other regions. This geographic focus can increase vulnerability to regional economic or political events. Geographic diversification can enhance portfolio stability by spreading risk across different markets. Consider increasing exposure to developed and emerging markets outside of the Americas to capture growth opportunities and reduce regional risks.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

Click on the colored dots to explore allocations.

The portfolio can be optimized using the Efficient Frontier, which identifies the best risk-return ratio. Currently, the portfolio's expected return is below its potential. By reallocating existing assets, it's possible to achieve an expected return of 28.34% while maintaining a similar risk level. Efficient Frontier optimization focuses on maximizing returns for a given level of risk, not necessarily diversification. Consider rebalancing the portfolio to align with this optimal risk-return profile.

Dividends Info

  • Advance Auto Parts Inc 2.30%
  • ALPS Clean Energy 1.30%
  • AFC Gamma Inc 14.80%
  • Ally Financial Inc 3.20%
  • Alexandria Real Estate Equities Inc 5.00%
  • ASML Holding NV ADR 0.90%
  • iShares J.P. Morgan EM Corporate Bond ETF 4.20%
  • Chevron Corp 4.20%
  • Devon Energy Corporation 3.60%
  • Enbridge Inc 6.40%
  • Equinor ASA ADR 12.40%
  • iShares MSCI Brazil ETF 8.50%
  • Ford Motor Company 7.50%
  • Freeport-McMoran Copper & Gold Inc 1.40%
  • Generation Income Properties Inc 13.00%
  • Intel Corporation 1.80%
  • Kraft Heinz Co 3.80%
  • Microchip Technology Inc 3.00%
  • MFA Financial Inc 12.90%
  • Altria Group 7.20%
  • Noble Corporation plc 4.20%
  • Novo Nordisk A/S 1.30%
  • Realty Income Corp 5.70%
  • Qualcomm Incorporated 1.60%
  • B. Riley Financial Inc 19.80%
  • Rithm Capital Corp. 9.00%
  • Science Applications International Corporation Common Stock 1.30%
  • Companhia Siderurgica Nacional ADR 8.00%
  • SLR Investment Corp 7.50%
  • Sociedad Quimica y Minera de Chile SA ADR B 0.60%
  • Stellantis NV 11.80%
  • Toronto Dominion Bank 5.60%
  • Vale SA ADR 9.70%
  • Verizon Communications Inc 6.40%
  • Walgreens Boots Alliance Inc 9.60%
  • United States Steel Corporation 0.60%
  • Olympic Steel Inc 1.10%
  • Weighted yield (per year) 4.42%

The portfolio has a total dividend yield of 4.42%, with notable contributions from stocks like B. Riley Financial Inc and AFC Gamma Inc. Dividends can provide a steady income stream, but relying heavily on high-yield stocks can increase risk. Evaluate the sustainability of these dividends and consider diversifying with stocks offering stable, moderate yields. Balancing growth and income can enhance overall portfolio performance.

Ongoing product costs Info

  • ALPS Clean Energy 0.55%
  • iShares J.P. Morgan EM Corporate Bond ETF 0.50%
  • iShares MSCI Brazil ETF 0.59%
  • Weighted costs total (per year) 0.06%

The portfolio incurs costs from ETFs, with expense ratios ranging from 0.5% to 0.59%. While these costs are relatively low, minimizing expenses can significantly impact long-term returns. Consider reviewing the fee structure and exploring lower-cost alternatives to improve net returns. Reducing costs is a straightforward way to enhance portfolio efficiency without altering the risk profile.

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